As of Jan 01, 2015, new rules to locate telecommunication, radio or TV broadcast and electronic services shall come into effect.
The change will imply that if these services are rendered to end-users, then they shall locate at the State where the end-users are domiciled or habitually reside. Besides, a “Mini One – Stop Shop” shall be established to allow companies to opt to present their VAT tax returns for these services in a single Member State.
✔ Under the current VAT regulations, when these services are provided to end-users (not acting as VAT taxpayers) they are located in the State of the service provider, if it is established in the EU.
With the new rule, these services will be located in the State where the end-user resides.
✔ In order to avoid that companies have to be identified and registered in each Member State where the end-user is located, they can opt to register in this new system and file their VAT returns from a single point, in the Web Page of the State of Identification.
✔ For example, if a Spanish company renders electronic services to end-users domiciled in Spain, Italy and France and opts for this system, it will have to:
(i) Declare VAT for services rendered to Spanish end-users in the VAT return that it usually flies before the Spanish tax authorities, with the rest of transactions performed.
(ii) However, it will declare under the Mini One – Stop Shop system VAT for services provided to Italian and French end- users, through the Web Page of the Spanish tax authorities, without the need to be identified in all of these States.
✔ There are specific rules in relation to choosing one Member State or another and a specific system for companies not established in the European Union. Please remember that as of Oct 01, 2014, you can start with the registering process.